Halton Credit Score And Car Loan Myths Busted
Halton Credit Score And Car Loan Myths Busted
Posted on May 28, 2021
We must admit that we enjoy blog posts like these. It gives us the chance to right some wrongs and clarify what is often a poorly understood industry. That’s why we take every opportunity to write them! It’s the turn of our Halton credit score & auto loan team to write the post this time.
We all have one credit score
Not true. We do refer to ‘your credit score’ as a singular but you actually have two. Canadians do anyway. Other regions have three or more. Here we have two credit bureaus, TransUnion and Equifax.
Both create and maintain credit scores and they do it in slightly different ways. So, while we refer to ‘your credit score’ it should more correctly be ‘your credit scores’.
My credit score increases when I get a raise
Not true. Your credit score is a measure of how you handle credit, not of how much you earn. A credit score isn’t interested in your net worth or your salary. It is only concerned with your debt, how much you have, how you pay it and whether you miss payments or not.
Earnings do not affect your credit score at all aside from making it easier to pay what you owe.
You can check your credit score once a year for free
True but that’s not the whole story. This is a very common myth and one we come across a lot. You are entitled to one free credit check per year, per bureau. That means technically, you’re allowed two credit checks per year, one for each of the two bureaus.
There are also other ways to check your credit report. Some credit card protection products and other financial products offer free credit checks whenever you like as part of the price.
My partner got into debt which will affect my Halton credit score
Not necessarily true. The fact your partner is in debt may not impact your credit score at all. It may not impact theirs either as long as they can make payments. If they miss payments or get into trouble, it still might not impact your score.
Your credit scores are individual. The only way a partner’s score impacts yours will be if they miss payments on a joint debt. Then you will both take the hit. Other than that, what they do with their debt should not impact your credit score.
I don’t have debt so I should have a perfect credit score
Not true. This is another common myth. The idea that you’re good with money and have never borrowed so you should have a perfect credit score. How?
If a credit score is a measure of how you handle debt, how can you have a perfect score if you have never had debt? You will very likely have a low credit score as you’ll be an unknown entity as far as the credit bureaus are concerned.
If you have never had an auto loan or credit card, how can the bureaus tell how you handle them? How regularly you pay them or how well you manage borrowing?
Being debt free is a measure of being fiscally sound but not of how you handle credit. The two are very different things.
Have any credit score myths you would like us to dispel? Contact one of our Halton auto loan team and let us know!
Contact Unique Chrysler for help, advice and competitive Halton car finance and leasing.
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